Consumer credit information is typically utilized by merchants, such as credit card issuers and banks, to determine the credit worthiness of a consumer. The credit worthiness of the consumer is in turn used by the merchants to determine if the merchants will enter into a transaction with the consumer. In many instances, the merchant may be a lender which determines if it will enter a loan transaction with the consumer, what amount it will lend to the consumer, and the terms of the transaction, such as interest rate, based upon consumer credit information. To receive merchant offers, consumers must give merchants permission to look at the consumer's credit information, such as credit reports maintained by credit bureaus, such as Equifax, TransUnion and Experian. The credit reports maintained by these credit bureaus contain information regarding the consumer's credit, such as outstanding accounts, account balances, and other relevant information such as accounts placed for collection by creditors.
In a typical consumer-merchant transaction, the merchant receives permission from the consumer to view consumer's credit report. A consumer's consent to allow a merchant to view the consumer's credit report, however, can have a negative effect on the consumer's credit rating. This is due to the credit inquiry being merchant driven, along with the general proposition that the higher number of accounts a consumer may have or apply for, the higher risk that the consumer will default on one or more credit transactions. In addition to utilizing the consumer's credit information to determine the consumer's credit worthiness for the purposes of the merchant's own transaction, the merchant can use the consumer's credit information for other purposes, such as future solicitations.
With the increase of electronic transactions, credit reports are becoming increasingly important in evaluating consumer transactions. Where consumers were once judged on a combination of subjective and objective information, today credit reports are increasingly used as the sole or primary criteria used by lenders and merchants to evaluate the credit worthiness of a consumer. And although consumer credit reports are becoming increasingly important, consumers presently do not have readily available up to the date information regarding their credit, as well as information indicating what factors help or hurt consumer credit ratings. Furthermore, consumers often do not understand how lending decisions are made based upon credit, credit scores, and what components can contribute to credit scores. Currently, consumers can often only receive information regarding negative items listed on their credit report through being denied credit. Even after being denied credit, the consumer may only then be provided standard statements as to the items that led to the deny of the credit or loan, such as too many recent new accounts, or too many accounts having high balances.
What is needed is a system and method enabling consumers to obtain up to the date credit information, including customized information that helps consumer evaluate positive and negative aspects of their credit report, as well as how the consumer can go about improving their credit rating. Moreover, what is also needed is a system and method that allows consumers to receive pre-approved offers from merchants, where the merchants do not make merchant inquiries into the consumer's credit report that can negatively affect the consumer's credit rating. A system and method for obtaining pre-approved offers would also be advantageous where the merchants can provide consumers offers without seeing the consumer's credit report so the consumer's credit report can be maintained in confidence. Finally, it would be advantageous for the consumer to be able to obtain credit report information and merchant offers through a trusted third party agent that can receive the consumer's credit data, maintain the data in confidentiality, receive merchant criteria for pre-approved offers, and identify to consumers those merchants offers for which the consumer has been pre-approved.